ALJ/KLM/jva Mailed 8/26/2005

Decision 05-08-013 August 25, 2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Regarding Policies, Procedures and Incentives for Distributed Generation and Distributed Energy Resources.

Rulemaking 04-03-017 (Filed March 16, 2004)

INTERIM OPINION ADOPTING CHANGES
IN INTERCONNECTION RULES FOR DISTRIBUTED GENERATION

This decision adopts changes to rules governing interconnections between distribution systems of electric utilities and distributed generation (DG) facilities, which are power generators owned and operated by customers and which may provide power to the utility. Our order instituting this rulemaking stated our intent to consider such issues as they relate to metering requirements, interconnection fees and costs, and resolution of disputes between DG developers and utilities, among other things. We raised these issues hoping to simplify tariff rules, promote a fair allocation of cost responsibility and promote the development of cost-effective DG projects generally. Many of the tariff changes we order today have recently been adopted formally in a report issued by the California Energy Commission (CEC).

I. Background

The Commission opened this proceeding to refine its existing programs and policies for promoting the development of DG in California. As part of that effort, the CEC took the initiative to work with the utilities and DG community to update utility tariff rules for DG interconnections to the utilities' distribution systems. The culmination of this work was a staff report, approved by the CEC on February 2, 2005, titled "Recommended Change to Interconnection Rules." The CEC issued the report following a public process involving meetings with the Rule 21 Working Group.¹ The goal of the meetings and the report has been to determine whether and how utility interconnection rules for DG should be changed to promote safer and more cost-effective deployment of DG in California.

On February 16, 2005, the CEC served a Notice of Availability of the report on all parties to this proceeding and filed the report with this Commission for its consideration. The report recommends the Commission order the electric utilities to conform their tariffs to the recommendations in the CEC report and by implication recognizes the Commission's jurisdiction to effect those tariff changes. The CEC report "Recommended Changes to Interconnection Rules" is attached.

A ruling issued in this proceeding on March 1, 2005 solicited comments as to whether the Commission should adopt the CEC's recommendations for changes to utility interconnection rules for DGs and related ratemaking. Parties that filed comments on March 14, 2005 are San Diego Gas & Electric Company (SDG&E), Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E), the City of San Diego, Energy Producers and Users Coalition (EPUC) Cogeneration Association of California (CAC( and Americans for Solar Power (ASPv).